Political Fundraising (Hansard, 12 February 1997)

§ Mr. David Winnick (Walsall, North)
I beg to move, That leave be given to bring in a Bill to make provision in respect of the funding of political parties at general elections and other times. The Bill proposes to regulate the method of political funding. The present system is most unsatisfactory, and reform is urgently needed.
I should like to see four changes made. First, I want an appropriate authority, be it the Committee on Standards in Public Life, chaired by Lord Nolan, or a new body, to be responsible for looking into how political parties raise funds, and for political parties to submit financial reports annually to such a body.
When Lord Nolan's committee was set up, Opposition Members, both Back-Bench and Front-Bench, wanted it to look into party finances. We remain dissatisfied with how the Tory party collects its funds, and the Tory party says that it is not happy with how we collect ours. That is a strong argument in favour of Lord Nolan's committee looking into the matter.
The Prime Minister, however, was adamant and said that under no circumstances would the matter be referred to the Nolan committee. I can only conclude that the Conservative party has much to hide when it comes to how it collects its money. I do not believe that the Tory-dominated Home Affairs Select Committee is the best body to look into the issue of party financing. An outside body, certainly not made up of parliamentarians, would be far better. I hope that that reform will be carried out.
The second reform I want is that all those who donate more than a certain amount to a political party should be identified. Some say that there should be secrecy in those matters, but I cannot see the argument for that. It may be argued, for what it is worth, that those who donate small sums should not be identified, but there is every reason to identify those who donate thousands of pounds and more. If I were asked what limit I would place on identification, I would say that the source of any sum above £5,000 donated to a political party should be identified accordingly.
Tory Members have recently made a great deal of fuss about the Leader of the Opposition's funding—[Interruption.] I see that they are responding as one would expect. They say that they are unhappy about it. I understand that Sir Gordon Downey has approved the method by which the Leader of the Opposition's office has collected funds, and it is in the Register of Members' Interests. If Tory Members are not satisfied about how the Labour party is funded, that is all the more reason for approving these reforms. We should let the whole matter go before the Nolan committee or a new body.
The third change I propose is that all overseas donations to political parties should be banned, with one exception. If an individual living abroad is a full United Kingdom citizen who has the right to vote in this country and has lived here for most of his or her life, it would be wrong to take away that individual's right to donate money. In the past few years, Hong Kong billionaires have been helping to finance the Tory party, and that scandal must come to an end.
341 There is a further change that I want to see. For more than 100 years, the amount that could be spent on behalf of a parliamentary candidate—indeed, a local government candidate for that matter—has been limited. The sleaze that occurred more than a century ago was tackled. There is no longer any controversy over the matter. All parties in the House agree that it would be wrong to try to buy votes in one's constituency, and that there should be a limit on the amount that is spent on our behalf. That sum is updated in line with inflation. I have not heard any controversy in the House about that issue. There is an Order in Council following discussions between the political parties.
If that is right, and obviously it is, what sense is there in having a situation whereby nationally a party can spend as much as it likes? It is a contradiction to the limit on candidates in our constituencies. I believe that a change is required.
These are all modest, long-overdue reforms. There are those, however, on the Government Benches who believe in secrecy. For example, the hon. Member for Colne Valley (Mr. Riddick), who is in his place at the moment, was quoted in The Times in June 1993 as saying: I think the Party"— his party, of course— is too open about its affairs as things are. I don't want more openness". Those are the hon. Gentleman's views.
Lord McAlpine has some experience in Tory party financing. He should do, because he was its treasurer for some 15 years. He said that when he was treasurer he believed in secrecy, that it was right and proper that no information other than what the party wanted to disclose should be given. He has changed his mind—he has changed his party. He now argues that the time has come to end such secrecy. He also said—I do not know whether his tongue was in his cheek—that it would help the Conservative party if it was more open.
Many people in the Tory party—perhaps not on the Tory Benches, but reformists, such as Eric Chalker and the rest—have long argued that there should be more democracy, more openness, more detailed financial accounts in their party. I hope that, if they hear about my modest Bill, they will support it.
I mentioned Hong Kong billionaires. It is said that they have given more than £11 1 million in the past few years to the Tory party.
Then there is Asil Nadir. Of all the money that he contributed to the Tory party, nearly £500,000 was stolen money. The Home Secretary is in his place. He says at every opportunity that he believes in law and order.

§ The Secretary of State for the Home Department (Mr. Michael Howard)
indicated assent.

§ Mr. Winnick
He nods his head in agreement. But one aspect of law and order is to see that his party returns stolen money. I believe that the Home Secretary and the Attorney-General have a duty, a responsibility in government, to see to it that that is so. Unless the Home Secretary does so, it is total hypocrisy on the part of Ministers.
342 It is said that the Tory party is not concerned with people who seek honours. Sixty-five per cent. of honours to industry under Lady Thatcher, and 68 per cent. under the present Prime Minister, went to those who contributed to Tory party funds. That may be pure coincidence. On the other hand, those who are more cynical will take the view that honours were given to those people because they contributed substantial sums to the Tory party. If Lord Nolan's committee or an appropriate body did the job that I propose in my Bill, it would investigate that, just as it would investigate any aspect of Labour party matters about which the hon. Member for Dover (Mr. Shaw) would be concerned.
I accept, because I am a realist, that my Bill will not become law in a Tory-dominated House of Commons, but I hope that when a Labour Government are elected later this year, one of the first reforms that we will introduce will be on party financing. The reforms and changes that my hon. Friends and I want to see will, I am sure, be very much on the agenda of that Labour Government. I want to see change and reform to undermine the sleaze, and the furtive, underhand way in which the Conservative party collects its money.

§ Mr. David Shaw (Dover)
There are three reasons for opposing the Bill: Labour hypocrisy, Labour hypocrisy and Labour hypocrisy. The Bill is mischievous. Before the last election, we heard cant and rubbish from Opposition Members about the Conservative party being financed from Saudi Arabia. They named a Saudi prince, but immediately the election was out of the way the truth came out. They had to withdraw the accusation, libel damages were paid to the prince and it was shown to be yet another Labour lie about Conservative party funding.
The Bill does not disclose what Labour is up to with its own financing. Nowhere in the Bill is there any information about how the Labour party accounts for its trade union moneys, which are still its primary source of finance. I have been through the Labour party accounts—I have them here—and I defy anyone to discover how much the trade unions give the Labour party in total. The accounts are misleading, and cover up the true position.
Labour is still heavily dependent on the trade unions: it is tied to them. It has changed the arrangements, and now has what it calls a constituency plan agreement, the wording of which I have managed to find out. Under such agreements, the constituency Labour party and the union undertake to recognise the value of the organisational links, between the Labour Party and its affiliated trade unions". Under those agreements, the constituency Labour party and the trade unions are committed to co-operating, with the union at appropriate levels, in line with the union's rules". Under the new arrangements, the Labour party is absolutely committed at national and local level to working with the trade unions. Trade unions still make donations to the Labour party. They still make tied donations: donations tied to performance. The Labour party still has to deliver to the trade unions.
We have confirmation that donations to the Conservative party are not tied. We have no less an authority than Mohammed Al Fayed himself, who complained that he got absolutely nothing from the 343 Conservative party for his £0.25 million. Those who donate to the Labour party actually get something, and there are secret joint committees of the Labour party and the trade unions.
The Labour party is in a serious mess. Its funding is still in difficulty. In its accounts and public statements, it claims to have 400,000 members, but when it came to telephoning its membership, it could reach only 200,000—the other 200,000 were missing. The problem was that the unions have not purchased enough membership cards.
The Labour party goes in for secret funds. The amount of its funds which is interesting is not what is published in the accounts: it is what is in the secret or blind funds. I have identified at least six blind funds, and possibly a seventh. There is the Leader of the Opposition's personal blind fund; the deputy leader of the Labour party's personal blind fund; the shadow Chancellor's personal blind fund; the industrial research trust; the Westminster objectors trust; the Front Bench research fund; and the seventh fund that I have identified, apparently involving the hon. Member for Hartlepool (Mr. Mandelson), is the Labour party's Soho fund. I shall not say anything more about the hon. Gentleman and his connections with Soho.
Let us look at the Labour leader's blind fund. In a statement to the 1996 Labour party conference, the right hon. Gentleman said: we will legislate to make the Tories tell us where their money comes from. He did not say that he would legislate to make himself declare where his own money came from. Where does his money come from? Is it a blind fund set up by lawyers to evade the rules of Parliament? The answer is that it has certainly been set up to evade the rules of Parliament, but what it has not succeeded in doing is being blind, because the newspapers have already told us who donates. Indeed, the leader of the Labour party plays tennis with those who donate. "Anyone for tennis?" takes on a new meaning—"Anyone to donate to the Labour leader's fund?"
The Labour leader meets those who donate over lunch at Mr. Levy's house in north London. He knows who is donating to his Labour leader's private fund; there is no secrecy there. That is what Sir Gordon Downey was not told. Those who read Lord Rees's letter to The Daily Telegraph, and Lord Richard's statement in column 1712 of the House of Lords Official Report, will find that no mention was made of what happened at Mr. Levy's house, or of the Labour leader's meeting with the donors, in the information that was given to Sir Gordon Downey. It would seem that Sir Gordon was seriously misled by the Labour leader's office—and, by implication, by the Labour leader himself—in that those concerned were not open and honest in the information they gave him.
The fact is that the Prime Minister does not have a similar secret fund. He does not need to have blind funds of a personal nature. The Bill is hypocritical in the extreme. I understand from The Times that the Labour leader's blind fund has been used to pay personal expenses. According to that newspaper—and it has not been denied—it is not used just to pay the Opposition Leader's office expenses.
344 Some Opposition Members may ask what is wrong with blind funds. Quite simply, they do not work. The donors rarely remain silent; sooner or later, they seek recognition for their donations—and, as we know, in the Labour party recognition means favours, and getting something back.
The fact is that the Labour leader's blind fund is not just an onshore fund, as has been suggested. Mr. Levy's business connections extend to Switzerland and Guernsey, areas that are not known for ensuring that British income tax is paid at the level at which it might be. That is unattractive, and the Labour leader should clean up his act. We do not need ten-minute Bills; we need honesty and openness from the Labour leader and his office.
The fund has been shrouded in secrecy. That secrecy has partly failed, and is causing serious problems. It is disgraceful that it appears that Sir Gordon Downey may have been misled into giving some indication of approval, when he had not been given all the information about how the fund operated and who the Labour leader met at the tennis and lunch sessions at Mr. Levy's home.
This is very unsatisfactory. The newspapers have made clear how unsatisfactory it is. The fact is that a number of donors have already admitted that they donate to the fund; the fact is that there are overseas connections; the fact is that there have been soundbite cover-ups and a lack of openness from the Labour party. The existence of the fund was first disclosed at the end of November and the beginning of December, yet there has been no honesty or openness from Labour. Come out with the names of all the donors. Admit it. Let the Labour leader live up to the speech that he delivered to the party conference in front of all those journalists, the British public and the Labour party. Stop the secrecy in the Labour party. It is a disgrace, and Labour should be ashamed of it. I oppose the Bill.
Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business), and agreed to.
Bill ordered to be brought in by Mr. David Winnick, Mr. Tony Banks, Mr. Dennis Skinner, Mr. John Spellar, Mr. Paul Flynn, Mr. Robert Hughes, Mr. Doug Hoyle, Mr. Michael Clapham, Mrs. Gwyneth Dunwoody, Mr. Ken Eastham, Mr. Andrew Mackinlay and Mrs. Anne Campbell.

§ Mr. Winnick
Virtually everyone wanted to be on the list of supporters, Madam Speaker, but I had to make priorities. I hope that my other hon. Friends will excuse me.